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Energy minister eyes differential tariffs on electricity to spur regional development

Published: 10 Feb. 2026, 11:00 Updated: 10 Feb. 2026, 16:28

LEE SOO-JUNG
[email protected]

Minister of Climate, Energy and Environment Kim Sung-whan speaks during a press conference held at the Sejong government complex on Feb. 9. [JOINT PRESS CORPS]

SEJONG — Minister of Climate, Energy and Environment Kim Sung-whan said Monday that differential electricity tariffs would serve as leverage to encourage companies to relocate to Korea's provincial regions, contributing to regional development.

During a press conference held at the Sejong government complex, Kim said imposing cheaper electricity rates in regions that display energy self-sufficiency would entice corporations that consume massive amounts of power to relocate in a bid to reduce costs.

“The ultimate goal of this policy is to induce competent corporations to move to the Gyeongsang or Jeolla regions where they can benefit from cheaper electricity rates,” Kim said. “It is not simply about differentiation, but about how to address a phenomenon where companies are clustered in the greater Seoul area.”

The basic principle of the scheme is to offer cheaper rates to regions that produce a considerable amount of electricity on their own and charge higher prices to areas — notably the capital region — that receive electricity from other provinces or cities.

Korea's southern port city Busan boasted an electricity self-sufficiency rating of 169.8 percent last year, for example. However, under the current flat pricing system, which standardizes electricity pricing nationwide, businesses in the city have faced the same electricity prices as those in Seoul, where self-sufficiency sits at around a mere 10 percent.

“If challenges in recruiting talent to the rural regions remain, wouldn’t cheaper electricity be an incentive to make them move?” Kim said.

The minister said the government will review how to calculate the costs of large-scale power transmission and distribution under the differentiated scheme. Yet, Kim held back his answer on whether the scheme would be applied to households.

The government is expected to release its research results on the plan and its potential effect, as well as its zoning details, by the end of the month.

Kim also stressed the nation’s unwavering commitment to advancing solar technology, calling Korea the “sole nation” capable of competing with China in the global market.

According to the International Energy Agency, China accounted for 78 percent of global solar module production capacity and 87 percent of global solar cell production capacity in 2024. Solar modules utilize solar cells to convert sunlight into energy.

“If we give up, China will take the entire 100 percent,” Kim said.

“Then, the harmful effects of a monopoly will eventually surface. Despite the current gap between China and Korea, we are trying to sustain our solar industry through policy support and improve efficiency through technological innovations, particularly in perovskite tandem solar cells.”

Perovskite solar cells are an emerging technology that can tackle the shortcomings of silicon-based solar cells. Perovskite solar cells are lightweight and can be manufactured through a simple process.

The minister also said that a working-level dialogue with China is currently underway regarding the potential repatriation of Fu Bao, the first giant panda born in Korea through natural breeding.

“Animal rights have become as important as basic human rights,” Kim said. “In the case of pandas, as far as I know, [authorities] are reviewing habitat conditions and assessing whether it is animal-friendly. However, nothing has been finalized as of now.”

Minister of Climate, Energy and Environment Kim Sung-whan explains an electronic dashboard displaying daily power supply information in his office at the Sejong government complex on Feb. 9. [JOINT PRESS CORPS]

BY LEE SOO-JUNG [[email protected]]